Bitcoin, ethereum and other major cryptocurrencies have exploded in recent weeks as the market braces for a $15 trillion earthquake.
The bitcoin price has almost doubled this year (sparking fears the investment “window” may be closing) as traders abandon smaller cryptocurrencies in favor of bitcoin and its nearest rival ethereum following a U.S. crackdown that some think is part of a plot to destroy the market.
Now, as the world’s largest asset manager leads a surprise Wall Street charge into bitcoin and crypto, the International Monetary Fund (IMF) has suddenly softened its previous attitude toward crypto bans, warning they “may not be effective.”
“While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run,” three senior IMF economists wrote in a blog post discussing central bank digital currency (CBDC) adoption and crypto regulation.
China cracked down hard on bitcoin, ethereum and other cryptocurrencies in 2021, expelling bitcoin and crypto miners from the country and briefly crashing the market before crypto companies established themselves in the U.S. and around the world.
The IMF has clashed with El Salvador since the country gave bitcoin legal tender status in 2021, warning of “underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection.”
Earlier this year, the IMF said that “outright [crypto] bans should not be ruled out,” and called for a “coordinated response” to the rise of crypto that it warned could undermine the global monetary system.
The IMF’s softening stance toward crypto comes as the U.S. embarks on the crypto crackdown in the wake of 2022’s market downturn that wiped away $2 trillion of value and culminated with the implosion of major exchange FTX.
